Two conflicting reports haven been published recently. On one end, the American Association of Individual Investors (AAII) says that the weekly bearish sentiment of investors is reaching new highs at 48% (see chart below). On the other hand, the Global Fund Manager survey from BoA, signals that cash levels are at 15 year lows (3.5%), indicating that profesional managers are betting heavily on this market, minimizing the cash drag on performance. Which signal should we pay attention to? We should probably listen more carefully to professionals, since they are better informed, but we should also listen to their clients, the individual investors, which are probably overwhlemed with the high level of uncertainty in this market: what will happen to the deficit? To tariffs? Are we getting into a trade war with Europe, Canada, Mexico and China? Is inflation coming back? These are some of the bricks in the wall of worry this market is climbing. Frothy valuations is another one. The climbing is getting tougher.
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